Home Forums Logistics Wholesale shipping from Manufacturer to my customer.. what shipping terms do I quote?

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  • #1000038
    Mcl
    Member
    • Total posts: 3

    Hi all,

    I am in Australia and will hopefully be selling a new patented product of mine wholesale to a small business in the US for distribution. My product is manufactured in China.

    I am looking to quote the US business my wholesale cost for the items and shipping, they will then pay me and I proceed to pay my supplier in China to make and ship the items to US on my behalf.

    In order to be as transparent as possible for costs for purchasing I would like to provide the US business with approx shipping costs for 500 pieces, 1000 pieces (small lightweight items so probably sent via air) etc.. which include all duties and taxes – basically to let them know upfront how much it will cost to get the items to their door.

    I understand this is DDP (?) cost and this is what I should have my supplier provide me with to give to them.

    What do other wholesalers do for shipping charges to their customers in a B2B relationship when sending goods straight from their supplier in China?

    Do you wear the cost of shipping? Do you quote them shipping costs for FOB and make sure they are aware they need a freight forwarder and will need to pay out more for customs and duties etc? Or quote them the full DDP cost?

    Curious to learn how other businesses do this … Appreciate all responses.

    Thanks heaps

    #1222431
    Paul – FS Concierge
    Moderator
    • Total posts: 3,117

    Hi and welcome to Flying Solo.

    Hopefully you can get an answer for your question here.

    Cheers

    #1222432
    LucasArthur
    Participant
    • Total posts: 3,158

    Howdy

    Although its a little outside of my scope, it will depend on how you approach it IMO.. If you are selling as if a local business, i am sure that the buyers would expect duties paid and a landed cost or only domestic (within con) fees.

    If you pitch it to them that they are an importer in the process, them i am certain they would be happy….

    Note, each variable has a myriad of issues though.. Insurances and the likes…

    Your questions poses many thoughts in my mind, and a few others i would expect, such as:
    are you registering within the US as an entity
    platform you are selling on
    and only the US

    Cheers and good luck
    Jason

    #1222433
    Mcl
    Member
    • Total posts: 3

    Hi Jason,

    thanks for your reply. Yes, I am of the impression that duties etc paid is the way to go but I am curious how others do it.

    As for your other questions, I would have a distribution agreement with them that would allow me to sell online worldwide (but mainly it will be Aus buyers due to cost of shipping outside of Aus, would far outweigh the cost of the item) and they would have exclusive distributor rights within US and Canada. I was not planning on registering as an entity within the US. Is this something I would need to do?

    #1222434
    bb1
    Participant
    • Total posts: 4,472

    I’ve read and reread your query, and I do wonder if you are over complicating things, or I have just missed something along the way.

    When I purchase products from my suppliers (my other business), which has being imported they just give me the wholesale price per item (less if bulk), but they don’t tell me their wholesale price, plus shipping, plus duty, plus, plus plus.

    I am not sure why your arrangement would be any different to you selling a product to the US business either as a total landed price in the US, or as a your Australian price, and they pay and worry about transport (etc). Ie. you either wholesale to them in the US, or wholesale to them from china.

    Are you over complicating things, and do you really want to tell them every component cost.

    #1222435
    Mcl
    Member
    • Total posts: 3

    Hi Bert,

    It’s quite possible I am overcomplicating things – hence my query on how others do it. :)

    So am I correct in thinking when you purchase from suppliers you are quoted a wholesale price and no shipping? Is that because they are wearing the cost of shipping to you?

    I was always under the impression that the buyer pays shipping as a rule. In this case I will be invoicing them my wholesale price for x number of items and I will then be paying my China supplier to make and send the items. So I will be paying shipping at that point, and it is not feasible for me to wear the cost of shipping. So I guess my question is – how do I factor in the shipping? by getting the landed price for them to add to my invoice or incorporate it into wholesale price per piece? They will not be liasing with the China supplier at all so I am not sure how to go about the shipping aspect.

    Thanks for all your help.. most appreciated.

    #1222436
    LucasArthur
    Participant
    • Total posts: 3,158
    Mcl, post: 268747, member: 117188 wrote:
    Hi Jason,

    thanks for your reply. Yes, I am of the impression that duties etc paid is the way to go but I am curious how others do it.

    As for your other questions, I would have a distribution agreement with them that would allow me to sell online worldwide (but mainly it will be Aus buyers due to cost of shipping outside of Aus, would far outweigh the cost of the item) and they would have exclusive distributor rights within US and Canada. I was not planning on registering as an entity within the US. Is this something I would need to do?

    Howdy

    Although you are asking how others do the supplying and charging, it will still come down to your distribution agreement with the distributor in the US… Are they going to be deemed the importer? If so, you just treat yourself as the factory (for conversations sake) and they are the US importer..

    You quote a price, they arrange the importation and all duties and fees associated.. IMO though, this isnt really the best way and again will come down to the minutia of your agreement with the said distributor (do you have one in place already or are you approaching people, thus the questions?)..

    Will circle back to my original reply.. If you are wanting them to be the importer, let them do that and follow a supply chain as if you are manufacturer (which technically sounds like you are even though you are not making the goods yourself as its your product per sae) or if you are wanting them to be a locally supplied item from within CONUS – you would need to ship them into the country including goods and charge localised freight – it will also come down to what the price point can burden.

    Overall, if its an exclusive distributorship – i see no reason why they would not be comfortable in ordering from an OS supplier and incurring fees associated with that IF ITS in the contract and that they COGS can burden said costs…

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